26/06/15
US, Iran contest Hormuz status in talks
US, Iran contest Hormuz status in talks
Washington, 15 June (Argus) — The US and Iran have yet to reconcile differences
over how to reopen the strait of Hormuz despite President Donald Trump's claim
that the waterway would reopen quickly or even that it was open already. "The
strait is already partially opened," Trump said on Monday, speaking alongside
French president Emmanuel Macron, a day before the G7 leaders' summit in France.
"Essentially, ships are starting to go out now," Trump said, adding that on 19
June — when the parties plan to sign the agreement — "it will be completely
opened." But even if the deal with Iran is signed on 19 June, it appears it
would only be the midpoint, not the culmination of the US-Iranian talks. Neither
the US nor Iran has released the text of the agreement due to be signed on 19
June. But both sides selectively disclosed the elements of the deal that reflect
their negotiating positions. Many details, including the status of Hormuz, have
been left to be hashed out over the following 60 days. On the US side, key
demands revolve around Tehran's nuclear program and reopening Hormuz to
navigation on pre-war terms. Despite Trump's comments on Monday, vessel traffic
through the strait of Hormuz has not changed since Sunday, based on AIS tracking
data. This suggests shipowners are waiting for the planned signing on 19 June
and further details before attempting transits. "Our expectation is that the
strait is going to be opened in a toll-free way for the long term," US vice
president JD Vance told CNBC on Monday, adding: "That's the sort of thing that
we're going to figure out in these technical negotiations." Tehran, in turn, is
eyeing a future role in controlling navigation through Hormuz, full sanctions
relief and accessing a "reconstruction fund" of up to $300bn to repair damage
caused by the US-Israeli strikes. According to Iran's semi-official Fars news
agency, which is close to the Islamic Revolutionary Guard Corps (IRGC), under
the agreement Iran would allow vessels to transit Hormuz without charge during a
60-day negotiation period,, which described the exemption as temporary. After
that 60-day period fees linked to safety, navigation, environmental and
insurance services could be introduced. Trump on Monday confirmed that Iran
could count on relief on US sanctions, but added that "it's really a behavioral
thing. If they do what they're supposed to do, that starts taking effect."
Vance, in a televised interview with CBS on Monday, separately confirmed that
Iran could eventually be able to access funds that he said would be ponied by
its Mideast Gulf neighbors. The US would be "absolutely open to the Gulf
countries investing in the reconstruction of Iran, but only if Iran ends their
nuclear program," gives up its stockpile of enriched uranium and accepts an
effective nuclear monitoring regime, he said. The Mideast Gulf Arab states have
yet to comment on the prospect of having to pick up the tab for damages after
the US-Israel war against Iran, during which their energy and civilian
infrastructure took significant damage from Iranian missile and drone attacks.
Trump is expected to meet with Mideast Gulf leaders on the sidelines of the G7
leaders' summit in France, which starts on Tuesday. The key outcome of three
days of frantic negotiations between the US and Iran on 12-14 June is that their
militaries stopped the hostilities underway since late May. In retrospect, the
resumed warfare resulted from efforts by the US armed forces to enable ships to
exit the Mideast Gulf through the part of Hormuz skirting the Omani coast,
rather than taking the route prescribed by Tehran. The Trump administration has
not disclosed whether the US military would continue efforts to wrest control of
Hormuz. But the US will maintain its naval blockade of the Iranian trade until
Hormuz is reopened, Trump has said. Vance on point Vance has again emerged as a
key Trump administration spokesman arguing for the benefits of the undisclosed
deal with Iran. Many Trump loyalists over the weekend began to express
reservations about the putative deal but appeared to direct their criticism at
Vance, rather than the US leader. "I am somewhat concerned that Iran's view of
the agreement seems different than what the American negotiating team is
claiming," senator Lindsey Graham (R-South Carolina) said on Sunday. Graham
called on "the architect of the deal, vice president Vance and his negotiating
partners" to present the agreement for review by the US Congress. By Haik
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